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Bapuji Dhanaji Thakare and anr. Vs. Ganpatrao Anyaji Gawande - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtMumbai High Court
Decided On
Case NumberCivil Revn. Appln. No. 541 of 1959
Judge
Reported inAIR1961Bom123; (1961)63BOMLR40; ILR1960Bom834
ActsIndian Arbitration Act, 1940 - Sections 16, 16(1), 19 and 30
AppellantBapuji Dhanaji Thakare and anr.
RespondentGanpatrao Anyaji Gawande
Appellant AdvocateM.W. Palekar, Adv.
Respondent AdvocateN.L. Abhyankar and ;S.V. Natu, Advs.
Excerpt:
.....1940), sections 16, 30, 19 - arbitrator deciding issues not referred to him and failing to decide matter referred to him -- award made by arbitrator whether a nullity -- whether court can remit such award to arbitrator for reconsideration.;where an arbitrator has acted beyond the scope of his jurisdiction in deciding certain issues which were not referred to him and he has failed to decide precisely the matter referred to him for his decision, the award made by him is not a nullity and the court can under section 16 of the arbitration act, 1940, remit the award to the arbitrator for his reconsideration.;haren chandra v. krishna kanta [1855] a.i.r. assam 61 and shree meenakshi mills v. patel bros. (1944) 46 bom. l.r. 841, p.c. referred to. - section 31(4) (since repealed) :[tarun..........in so far as he acted beyond the scope of his jurisdiction and also failed to decide precisely the matter referred to him for his decision. neither party has challenged these findings of the courts below and both parties before me agreed that the award was rightly set aside. the revision is concerned merely with the direction given in paragraph 10 of the judgment of the appellate court that the award should be remitted to the arbitrator for his reconsideration. the appellate court purported to pass this order under the provisions of section 10 of the indian arbitration act.2. mr. palekar on behalf of the applicants contended that section 16 cannot be attracted in the present case because where in a case like the present the award is set aside on the ground of misconduct, section 30 read.....
Judgment:
ORDER

1. The plaintiff-opponent filed a suit for possession of an open site alleged to have been purchased by him from the defendants-applicants. It was alleged that the plaintiff purchased the suit site on 19-6-1946 but that the plaintiff was dispossessed by the defendants in 1952. The defence was that the site in suit was not the site sold. The taking of forcible possession was also denied. On 9-11-1957 the parties applied to the trial Court that the matter in dispute should be referred to arbitration. Upon their agreement, the matter was referred to the arbitration of one Anandrao Chandrabhanji. This person, it may be mentioned here, was a witness in the suit on behalf of the plaintiff. The arbitrator made an award which the defendants challenged on the ground of the arbitrator's misconduct. Various allegations of misconduct were made but all the allegations going to show personal misconduct on the part of the arbitrator have been negatived. Both the Courts below have, however, found that there was a judicial misconduct on the part of the arbitrator in so far as he acted beyond the scope of his jurisdiction and also failed to decide precisely the matter referred to him for his decision. Neither party has challenged these findings of the Courts below and both parties before me agreed that the award was rightly set aside. The revision is concerned merely with the direction given in paragraph 10 of the judgment of the appellate Court that the award should be remitted to the arbitrator for his reconsideration. The appellate Court purported to pass this order under the provisions of Section 10 of the Indian Arbitration Act.

2. Mr. Palekar on behalf of the applicants contended that Section 16 cannot be attracted in the present case because where in a case like the present the award is set aside on the ground of misconduct, Section 30 read with Section 19 will come into play and the power under those sections does not extend to remitting the award for reconsideration. Mr. Palekar has relied upon a decision of the Assam High Court in Haran Chandra v. Krishna Kanta AIR 1955 Ass 61. The Assam case was a case where the reference was made to three arbitrators two of whom took part in the arbitration. They carried on some correspondence with the third arbitrator but it was found as a fact that it was only one of the three arbitrators who actually decided the matter and that the remaining two arbitrators had never applied their minds to the dispute before them. The High Court therefore declared the award void on the ground of misconduct of the arbitrator and therefore ordered that the suit shall proceed further. In coming to that decision, the Assam High Court followed the Privy Council decision in Shree Meenakshi Mills Ltd v. Patel Bros. . That was a case which arose from this Court wherein a matter in dispute was referred to the arbitration of a board consisting of nine persons and it was found as a fact that the nine persons had not taken part in the arbitration and some of them were absent on several occasions when the arbitration matter was proceeding before the Board. . The trial Judge, Chagla J., as he then was, took the view that the parties were entitled to an adjudication by all the nine members acting together and that therefore the Board as such had not functioned at all and the award was invalid. This finding was confirmed in appeal by a Division Bench of this Court who held that the decision of the Board was a nullity and must be set aside. When the matter went before the Privy Council, their Lordships observed at page 71 col. 2 as follows;

'For the purposes of this appeal their Lordships must assume, without deciding, that the proceedings before the Board of Directors were a nullity'.

This was the ground which was accepted in that, case, upon which it was held that Section 16 would not be attracted. This was also the ground which the Assam High Court accepted in Haran Chandra's case.. AIR 1955 Ass 61 for they held the award in that, case void.

3. These authorities merely show that where the award is a nullity, there is no power to remit it. Unfortunately, that is not the case here. In the present case, all that has been found is that the arbitrator acted beyond the scope of his jurisdiction in deciding certain issues which were not referred to him, and he failed to decide precisely the matter referred to him for his decision. That the arbitrator undertook to decide something which was not referred to him or did not decide precisely the matter referred to him, cannot normally avoid the, entire award. This is clear from the provisions of Section 16 itself, because clause (a) of Sub-section (1) of Section 16 enjoins that the Court must determine for itself whether what has been left undetermined or what has been determined in excess cannot be separated without affecting the determination of the matters referred. In other words, if it can be separated, that part of the award which is good must be upheld. This shows, therefore, that such an error in the proceedings of the arbitrator do not make the award a nullity. I do not think that the principle laid down in the Assam case following the decision of the Privy Council can apply to the facts of the present case.

4. The power of the Court under Section 16(1)(a) is a discretionary power. The trial Court in the present case completely failed to apply its mind to the question as to what should be done after the award was set aside. It merely set aside the award and observed, 'Suit to proceed' without considering the question whether it was not possible to remit the award for further decision by the arbitrator. The appellate Court was therefore perfectly justified in correcting this error in the order of the trial Court. The discretion was, in my opinion, correctly exercised.

5. The application for revision fails and is dismissed with costs.

6. Revision petition dismissed.


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